Debt Capital Markets Update Q1 2021
We are pleased to share LSEG’s Debt Capital Markets (DCM) update for Q1 2021. The update provides an overview of global DCM activity and highlights from London Stock Exchange, including key transactions and our initiatives with the global financial community.
- LSEG completed its all-share acquisition of Refinitiv in February. As one combined organisation with Refinitiv, LSEG now has a much broader Fixed Income offering covering capital raising, trading, risk management and data, which further strengthens our ability to support issuers.
- Global macro dynamics: Global issuance volumes for Q1 2021 exceeded Q1 2020 by 37%, with increased activity in North America and Canada. Central Banks have kept interest rates low, and whilst benchmark 10Y Treasury bond yields are returning to pre-pandemic levels, volatility remains low and flow in fixed income funds continues. Capital raised through sustainable debt finance was $286.5bn in Q1 2021, more than double issuance levels seen in Q1 2020, and an all-time record.
- Issuance volume: 2021 YTD, London Stock Exchange saw a number of deals from corporate, FIG, sovereign and supranational issuers globally, raising a total of $124bn through 217 bonds. International Securities Market (ISM) continues to grow, now with 234 admitted bonds, raising £82.9bn from 76 issuers from across the world, and up 88% YoY.
- Transition bond segment: LSEG became the first global exchange group to commit to net zero to reducing its emissions by almost 50% by 2030. To underline these efforts and following extensive consultation with the market, London Stock Exchange launched a new segment of its Sustainable Bond Market to allow issuers to display transition bonds and access the deep liquidity provided by the exchange’s membership. The new segment is open to use-of-proceeds bonds or general-purpose sustainability-linked bonds (where cashflows are linked to predefined sustainability objectives), in line with the Climate Transition Finance Handbook under the Green & Social Bond Principles, or as assessed by the Transition Pathway Initiative. You can read more about this and about LSEG’s support of transition finance here.
- The international hub for green, social and sustainability listings: £9.1 billion raised by 29 bonds from 15 issuers on Sustainable Bond Market in Q1 2021, a record for the platform, and over half of previous years’ entire issuance. We saw the first climate transition bond on the new transition bond segment from Cadent Gas raising €625mn, Chile’s debut international social bonds, the first sustainability-linked bond from a FTSE 100 company, Tesco, Natwest’s €1bn social housing bond, Hong Kong’s $2.5bn triple tranche green bond and IDB Invest’s $1bn debut sustainability bond among others.
- Driving Innovation in Capital Markets: LSEG successfully issued a c. $7bn syndicated transaction across 3 markets in USD, EUR and GBP under its newly established £10 billion GMTN programme – a milestone as this was LSEG’s largest bond yet, and its first USD Reg S/ Rule 144A issuance. Flow, LSEG’s digital platform to drive end-to-end automation in primary debt markets, was used to execute key transaction steps, and SparkLive Roadshow was used to conduct extensive investor marketing. This is the most complex transaction to use a primary DCM digitisation platform. In detail:
- Barclays, BofA Securities, Citigroup and HSBC acted as joint global coordinators for the offerings. Freshfields Bruckhaus Deringer LLP and Linklaters LLP acted as counsels to the issuer and dealer respectively, and HSBC Issuer Services was the issuer’s appointed trustee and paying agent. The bonds were listed on the Main Market of London Stock Exchange, and settled in DTC, Euroclear and Clearstream.
- To learn more go here.
To find out more about London Stock Exchange's Debt Capital Markets you can contact the Fixed Income team at firstname.lastname@example.org or +44 (0)207 797 3921.